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quote.bloomberg.com
07/31 07:25
Swiss Billionaire Ebner Sells Out as His Funds Slump (Update6)
By Parris Kellermann
Wilen, Switzerland, July 31 (Bloomberg) -- Swiss investor Martin Ebner, who helped engineer the $29 billion merger that created UBS AG, gave up control of the BZ Group Holding AG funds he founded after their value fell by half so far this year.
The 56-year-old billionaire, once hailed by investors as Switzerland's Warren Buffett, also cut his stakes in companies including Credit Suisse Group, ABB Ltd. and Investor AB, the Wallenberg family's holding company, BZ said in a faxed statement.
BZ Group's funds lost a combined $1.8 billion in value this year. Ebner's picks, which turned the ex-analyst into one of the country's richest men in the 1990s, are among the worst performers this year, with both Credit Suisse and ABB losing 50 percent
``The go-go 1990s are gone,'' said Christian Wagner, a fund manager at Wagner Consulting in Zurich. ``Ebner's influence among investors has been on the wane for two years.''
BZ Group said it sold a majority stake in the four funds including the flagship BK Vision AG financial-services fund to Zuercher Kantonalbank, the country's fourth-largest bank. Terms weren't disclosed. The funds are now worth about $2 billion.
Soros
Ebner joins hedge fund manager George Soros in scaling back his business. Julian Robertson closed his funds two years ago after a stretch of sub-par investment performance.
Ebner, who set up his investment boutique with a 7 million- Swiss-franc ($4.7 million) loan in 1985, made his fortune by buying big stakes in companies that lagged the market and putting pressure on managers to boost returns or sell. His strategy worked during the bull market. It's fallen apart as markets soured.
``He bought all the wrong stocks,'' said Dieter Winet, a fund manager at Swissca Portfolio Management AG, which oversees 45 billion Swiss francs ($30 billion) in securities in Zurich.
Credit Suisse is the worst performer among European banks this year partly because of concern about falling capital levels at the Winterthur Insurance unit. Credit Suisse acquired Winterthur in 1997 after Ebner pushed for the purchase. He had amassed a quarter of Winterthur's shares within just a few weeks.
ABB's shares plunged after the engineering company, whose directors include Ebner, bought back some of its shares last May.
The move backfired as ABB's debt tripled and Moody's Investors Services cut its credit rating to two levels above junk. Since July 24, when ABB reported a second-quarter loss, Ebner has had a book loss about 355 million francs on the stock.
Other setbacks included his failure to win a board seat at Roche Holding AG after acquiring a 20 percent stake in the drugmaker. He gave up and sold his shares in May 2001 to cross- town competitor Novartis AG. By then, Roche shares had fallen 27 percent in a year, making them the laggard among European rivals.
Limited Network
BZ Group, which cut its stake in Credit Suisse to less than 5 percent from 9.7 percent and in ABB to 9.7 percent from 10.1 percent, said it's selling control of the funds because its ability to attract retail investors is inadequate.
``Our distribution network is limited with 25 employees,'' said Kurt Schiltknecht, a BZ Group board member and Ebner's top associate, in a telephone interview. ``If a bear market is protracted, it's difficult if you don't have a wide network. The earlier bear markets were short. This time it's longer.''
Schiltknecht declined to discuss BZ Group's future, and Ebner wasn't available to comment. ``We don't comment on any questions about our business except for information that we're required to give,'' he said.
Ebner will continue to hold stakes in companies through BZ Group, of which he and his wife, who works at BZ and often fields phone calls for her husband, own about 45 percent.
BZ Group today said it now holds less than 5 percent of BK Vision, down from 68 percent last year. It also owns less than 5 percent of Pharma Vision AG, 17 percent of Spezialitaeten Vision AG and less than 5 percent of Stillhalter Vision AG.
BK Vision shares were down 2.9 percent at 182.5 francs at 12:45 p.m. local time. Ebner's Stillhalter Vision fund dropped 3.4 percent to 135.25 francs, Pharma Vision slumped 4.4 percent to 129 and Spezialitaeten Vision fell 6.8 percent to 73.65 francs. |
